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Monday, December 19, 2005

Lloydletta Was First Reporting Conflict of Interest in Mpls Biomass Energy Project

In a Lloydletta post on Monday, November 21, 2005, this blog pointed out a looming conflict of interest in a biomass project in Minneapolis. The Southwest Journal reported that that Michael Krause, former executive director of the Green Institute and close friend of Minneapolis City Councilmember Lisa Goodman was the head of new corporation (Kandiyohi Corp.) that plans to be a player in the burgeoning biomass energy field in Minnesota.

Today, the Minneapolis Observer reports that the dispute between Krause and the Green Institute has turned bitter with the potential to cost the city over a hundred thousand dollars:

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"Michael Krause, who left his position as executive director of the Green Institute last summer, has created a development company of his own and last week convinced a key City Council committee to reconsider its decision to work out a deal with the Green Institute. Krause’s firm, Kandiyohi Partners, also includes the former head of the city’s Empowerment Zone, Kim Havey. Both men are familiar faces at City Hall (Krause is a member of the Planning Commission) and both have close personal ties to Community Development Committee chair Lisa Goodman.

"Those connections were invaluable when Krause worked for the Green Institute, but now they appear to be steering some city officials away from the organization as a partner in the biomass project. The Transportation and Public Works Committee last week voted to halt the city’s negotiations with the Green Institute and issue a Request for Proposals in April that would open the project to more bidders.

"Carl Nelson, director of the Green Institute’s Community Energy Project, was not happy with the decision. “The Green Institute has gotten screwed,” he said.

"The organization does not oppose an open bidding process, Nelson said. “They should have done that from the beginning. The problem is changing the rules mid-stream.”

The Green Institute has invested some $110,000 on the biomass project already, money Nelson said was only spent because the city had given the organization the impression it was the only group in the running for the project. He hinted that the organization may ask to be reimbursed by the city."

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Many questions remain about this story. Will the local media investigate this matter or will the taxpayers have to fork over $110,000 in a settlement without anyone in government being held accountable?